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In this video tutorial, Matthew explains how to create a room rental agreement using legal templates. He directs viewers to a link for real estate forms, suggesting that they navigate to the forms section by clicking on "real estate forms" and selecting "tenants." He demonstrates how to locate the room rental agreement, advises choosing a state (e.g., Texas), and proceeds to fill in the agreement. Matthew highlights selecting the type of lease as either standard or month-to-month, and then prompts users to enter the principal tenant's name, subsequent tenants' names, monthly rent amount, and security details.